Uber dominates the rapidly growing market

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eMarketer - New York, NY (November 10, 2017)—With a similarly strong car culture to that of the United States, coupled with fairly decent roads and infrastructure, ride-hailing apps have found success in Brazil as of late.

Spurred in part by the country's economic woes, the use of ride-hailing apps has skyrocketed in Brazil over the past two years.

According to Mobile Time and Opinion Box’s latest research, 58% of smartphone owners in Brazil had used a car service app to order a taxi, luxury taxi or private car as of September 2017, up from 37% in the same period of 2016 and 18% in 2015.

The undisputed marketplace leader is Uber. It was the ride-hailing app of choice among 86% of respondents in the September 2017 survey. That’s an increase of 20 percentage points year over year.

In a distant second place, 99—formerly 99Taxis—accounted for 6% of rides followed by Cabify (3.5%), Easy Taxi (1.7%), among others (2.8%).

Additional data from an August 2017 survey by Dalia Research showed similar results, with 74.0% of ride-hailing app users in Brazil saying they had used Uber in the previous month.

Fernando Paiva, the editor and director of content at Mobile Time, informed eMarketer that Uber's growth has a lot to do with economics. Brazil is just beginning to emerge from a punishing recession, and consumers are looking for ways to save money.

“Any initiative to make transportation cheaper will be an immediate hit. The low prices for a shared ride on platforms such as Uber make it an attractive option in relation to using public transportation, depending on the route,” he said.

Although it's been almost 3.5 years since Uber began operating in the country's capital, São Paulo, there exists one possible obstacle that could hinder future growth for both Uber and local competitors alike—Regulators have now started paying closer attention to their services.

In a recent bill put forth by Brazil’s Senate, PLC 28/2017, the government wanted drivers to own their own vehicles, require them to have the same red license plates used by taxi drivers, and implement a ban on rides outside the city limits in which the car is registered.

These proposed regulations would make Uber, along with its competitors, virtually unable to continue operating within Brazil and set the country’s transportation industry back to what it was ten years ago, noted Dara Khosrowshahi in an interview with local newspaper Estado de S. Paulo during his recent trip to Brazil.

“We are not against regulation. Regulating services like Uber is totally appropriate. But these rules should be thought about looking toward the future, not the past,” he added.

With the recent loss of its operating license in London, Uber needed a win in Brazil.

By successfully teaming up with local rivals such as 99, Cabify, and Lady Driver, the companies were able to garner more than 800,000 signatures opposing the bill before last week’s Senate vote.

As a result, these companies appear to have beaten back the proposal that would have required their drivers to own their own vehicles and use the red license plates, but other restrictions—such as a ban on rides outside the city where the car is registered—may become law.

The bill will now head to the Chamber of Deputies for further discussion and approval before it ultimately reaches President Michel Temer’s desk to be sanctioned.

Since Brazil is one of the five largest markets for Uber—in terms of the volume of riders, drivers, and users— Khosrowshahi remains hopeful for the future.

“We want to continue investing in Brazil and try to build relationships with the government. Our goal is to make transportation readily available and affordable all over. This is something that every city wants as well.”